MReport Jan 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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26 | TH E M R EP O RT FEATURE also helping lenders identify red flags earlier. It can provide an alert if the borrower information is inconsistent if there are issues with a Social Security number's date or state of issuance if ad- dress records are inconsistent with employer addresses, and more. • • Increasing•Fallout—As interest rates have risen, refinances have diminished considerably. Add to that the fact that not everyone who applies for a mortgage, qualifies for a mort- gage. LendingTree recently did a study of 10 million mortgage applications. Credit history and debt were the most significant barriers to home application approval, which were each responsible for 26 percent of denials. This combination of factors is causing significant fallout. And currently, lenders pay for this fallout—meaning they are paying for the applicant's credit report. In other words, when an appli- cant doesn't qualify, and the loan doesn't close, the lender doesn't recoup the cost for the credit report. So, as fallout increases, so do the associated costs, and it is the lender who is bearing that financial burden right now. Suiting Up "Proper•preparation•prevents•poor• performance." —Charlie Batch, Former NFL Quarterback A s I mentioned before, to win the big game in 2019, it is im- perative for lenders to keep their pipelines full, reign in costs, and close more loans. Here are some ways to get your team game-day ready for whatever this year may throw at your lending operation: • • Building•your•pipeline: To find more potential appli- cants, you should look for a lead source that doesn't require any minimums. No minimums will make your lead generation efforts more affordable. Today's lead gen- eration programs let you select lead attributes based on credit scores, location, LTVs, bankruptcies, etc. And, these programs don't even require you to design a marketing piece. You can select a design from a library of mail piece options, and a printer will produce your selec- tion, and a mail house will send them to your prospect list. It's as easy as that! • • Retain•your•portfolio: The market will consolidate next year, so it is important to be vigilant and make sure that you are poised to succeed by adjusting your approach whenever neces- sary. To that end, you must ensure you keep the customers you already have. Use the technology that is available today to monitor your portfolio and to be alerted if any of your borrowers are shopping for a refinance or a new mortgage • • Reduce•costs: One way lenders can be savvier when it comes to spending is by utilizing a feature that allows loan officers only to pull a credit report from just one credit bureau. Then, requirements can be set, and if they are met, the two additional bureaus reports can be obtained. This process is a more fiscally responsible way to obtain credit. • • Assist•declined•applicants: If you have an applicant who is close to qualifying for a mort- gage, consider contacting your verifications provider for a more detailed review of the file. They might notice something that you cannot readily see. The truth is, even those who have been in the industry a long time do not always think of everything. Sometimes a fresh perspective can shed new light on a file that reveals simple changes that could be made to qualify the borrower. Let the applicant know that by becoming informed and working on their credit score, they could qualify for a mortgage down the road. There is a program available right now that will help you: • Secure and retain incremental mortgage loan prospects over the long term through consumer credit score education. • Equip your loan officers with a solution that helps consumers set a plan with meaningful ac- tions on how to reach a qualify- ing credit score. • Reduce stress through increased transparency—receive instant alerts when your prospect is qualified. • Increase revenue with higher application-to-close rates by keeping the consumer engaged. Any football team will tell you that some seasons are more dif- ficult than others. To be sure, 2019 promises to be a challenging one for the mortgage industry. Between evaporating refis, rate increases, lag- ging originations, and rising costs, lenders must be more strategic than ever and truly up their game to not just survive, but thrive, in the coming year. So, be sure to use all the tools at your disposal to tackle these issues head-on. Reach out to your verifications provider and ask them what resources and technology solutions they can offer you to capture more leads, better manage costs, and close more loans. Because when you anticipate what could happen, and prepare for those scenarios, your chances of winning the big game are far greater. GREG HOLMES•is• Managing•Partner•at•Credit• Plus,•Inc.,•a•third-party• verifications•company• serving•the•mortgage•industry.•He•can•be• reached•at• As 2019 takes shape, there are many things mortgage lenders should anticipate and prepare for as well. In our industry, winning the big game is akin to keeping your pipeline filled, keeping costs in check, and closing more loans. But, given the emerging trends that are expected to take hold this year, that may not be such an easy task. That's precisely why preparation is essential. NEW YEAR'S ISSUE

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